Pakistan's Ambitious Economic Growth Plan Faces Skepticism
Pakistan unveils an ambitious federal budget aiming for substantial economic growth, targeting a 4.2% GDP increase by 2026. Despite proposed reforms under IMF guidance, analysts remain doubtful, citing risk factors such as increased defense spending and unclear growth drivers, amidst historically consumption-led growth patterns.
Pakistan has revealed its ambitious federal budget aiming to significantly boost economic growth, yet analysts express skepticism over its feasibility. The budget, announced on Tuesday, targets higher revenues and aims to drastically cut the fiscal deficit through IMF-supported reforms.
Despite these objectives, defense spending saw a notable 20% increase following tensions with India, excluding military pensions. Customs duties on numerous raw materials and intermediate goods have been cut or removed to enhance industry competitiveness, Finance Minister Muhammad Aurangzeb stated at a post-budget press conference on Wednesday.
The government projects GDP growth to reach 4.2% by fiscal 2026, a stark increase from this year's revised estimate of 2.7%. However, given Pakistan's historical consumption-led growth patterns leading to financial crises, there are lingering doubts about achieving these ambitious goals.
(With inputs from agencies.)
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